This is the Contribution Margin of Harrison MFG product.

Sales Price 25

Variable Cost 14

CM 11

1. If fixed costs are 220,000, How much units should Harrison needs to sell to break even?
2. Calculate the Break even point in sales volume
3. If Harrison expected sales are 25,000 units, How much is the margin of safety?
4. If Harrison before tax target income is 88,000, how much units the company should sell?
5. Prepare a contribution margin income statement for the data in part 4, to compute the Degree of Operating Leverage
6. A new technology could reduce the variable cost by $3, but increase the fixed cost by $50,000 (including the cost of the new technology). Should Harrison invest in the technology?, Why?